Gartner sees spending growth across all sectors

Government and healthcare will lead a weak recovery in global IT spending this year, according to research from analysts Gartner...

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Published: 21 Jan 2003 12:42

Government and healthcare will lead a weak recovery in global IT spending this year, according to research from analysts Gartner Dataquest.

Gartner Dataquest is predicting worldwide business IT spending will reach $2,100bn (£1,300bn) in 2003, a 4.9% increase over 2002, but not even the fastest growing sectors will hit double digits.

Projections show an increase in all 14 vertical business segments, measured by Gartner Dataquest, compared with 2001 when five segments cut spending and 2002 when three markets saw an overall decline.

While US federal government spending on defence will drive government technology expenditures, civilian and intelligence agency segments will also see real growth in technology spending during the next two years, the research said

Rishi Sood, principal analyst for Gartner Dataquest's IT Services group, said growth in public sector IT spending would focus on security, outsourcing and modernisation projects, but warned that local e-government spending might get squeezed.

Financial services, manufacturing, government and communications, the largest global vertical markets will together account for 67% of worldwide business IT spending in 2003, but will see modest growth.

"Manufacturers continue to experience budgetary constraints, systems integration headaches, insufficient return on investment from previous IT investments and a lack of hot new applications and technologies," said Geraldine Cruz, senior analyst for Gartner Dataquest's IT Services group.

"Through 2003, manufacturers will require demonstration of return on investment over the short term before giving budgetary blessings to new IT projects, as well as drive IT initiatives to maximise existing IT investments."

Financial services organisations are expected to spend cautiously in 2003 and then boost IT spending by 2004.

"New clusters of spending in 2003 will include branch transformation and flexible infrastructure initiatives in securities and insurance," said Susan Cournoyer, senior analyst for Gartner Dataquest's IT Services group. "By 2004, business process outsourcing will surge."

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